With U.S. dollar interest rates now getting lower, foreign exchange risks have eased, potentially redirecting foreign investor funds to emerging and developing economies, including Vietnam. Which sectors will benefit? Monetary easing to support the market Following a 3.5% drop in the first half of September, the VN-Index of the Hochiminh Stock Exchange has rebounded since the middle of last month, recovering over 2.4% as of September 23. Notably, the 20-point gain on September 17 marked a significant turnaround. However, market liquidity remains moderate, indicating that investors are still cautious. On September 20, the U.S. Federal Reserve (Fed) reduced the base interest rate for the U.S. dollar by 0.5 percentage point, boosting global stock markets, where major stock indexes set new records. In contrast, the Vietnamese market showed little response. The VN-Index edged down on September 20 and 21 despite its earlier sharp gains on those days. Nevertheless, the easing of U.S. monetary policy is expected to have positive effects on asset markets earlier, especially as the Fed has just begun lowering interest rates. The Fed is predicted to further lower rates by 0.5-0.75 percentage point during its final two meetings this year. Fed officials foresee a total rate cut of […]
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